A fierce debate divided American Jewish communities in 1969-1970 over whether to accept government funding for Jewish day schools or maintain strict separation of church and state through private communal support. Analysis of correspondence between Jewish community leaders reveals deep ideological tensions between those who viewed governmental assistance as a threat to religious freedom and public education, and others who saw it as a natural extension of existing tax policies for religious institutions. Through examination of written communications and community discourse, competing constitutional arguments emerged: advocates of private funding through Jewish federations emphasized church-state separation as fundamental to American Jewish security, while proponents of tax assistance drew parallels between educational funding and established religious tax exemptions. The findings highlight an enduring challenge for American Jewish communities in reconciling practical educational needs with First Amendment principles concerning establishment and free exercise of religion. This historical analysis demonstrates that strategies for funding Jewish education remain contentious, requiring careful navigation of immediate institutional sustainability and broader implications for religious freedom and public education systems.